BRANDYWINE REALTY TRUSTBDN

BRANDYWINE REALTY TRUST Fair Value Disclosure

10-KFiled Feb 23, 20262 min read
9. FAIR VALUE OF FINANCIAL INSTRUMENTS
The Company determined the fair values disclosed below using available market information and discounted cash flow analyses as of December 31, 2025 and 2024, respectively. The discount rate used in calculating fair value is the sum of the current risk free rate and the risk premium on the date of measurement of the instruments or obligations. Considerable judgment is necessary to interpret market data and to develop the related estimates of fair value. Accordingly, the estimates presented are not necessarily indicative of the amounts that the Company could realize upon disposition. The use of different estimates and valuation methodologies may have a material effect on the fair value amounts shown. The Company believes that the carrying amounts reflected in the consolidated balance sheets at December 31, 2025 and 2024 approximate the fair values for cash and cash equivalents, accounts receivable, other assets and liabilities, accounts payable and accrued expenses because they are short-term in duration.
The following are financial instruments for which the Company’s estimates of fair value differ from the carrying amounts (in thousands):
December 31, 2025December 31, 2024
Carrying Amount (a)Fair ValueCarrying Amount (a)Fair Value
Unsecured notes payable$1,994,784 $2,027,570 $1,539,917 $1,537,210 
Variable rate debt$506,014 $501,541 $430,293 $403,880 
Fixed rate debt
$56,066 $58,935 $242,605 $232,804 
(a)Net of deferred financing costs of $13.0 million and $9.5 million for unsecured notes payable, $0.6 million and $1.1 million for variable rate debt and $1.3 million and $2.4 million for secured fix rate debt as of December 31, 2025 and December 31, 2024, respectively.

The Company used quoted market prices as of December 31, 2025 and December 31, 2024 to value the unsecured notes payable and, as such, categorized them as Level 2.
The inputs utilized to determine the fair value of the Company’s variable and fixed rate debt are categorized as Level 3. The fair value of the variable and fixed rate debt was determined using a discounted cash flow model that considered borrowing rates available to the Company for loans with similar terms and characteristics.

For the Company’s Level 3 financial instruments for which fair value is disclosed, an increase in the discount rate used to determine fair value would result in a decrease to the fair value. Conversely, a decrease in the discount rate would result in an increase to the fair value.

Disclosure about the fair value of financial instruments is based upon pertinent information available to management as of December 31, 2025 and December 31, 2024. Although management is not aware of any factors that would significantly affect the fair value amounts, such amounts were not comprehensively revalued for purposes of these financial statements since December 31, 2025. Current estimates of fair value may differ from the amounts presented herein.

Historical Timeline

Fiscal YearFiled
2025Feb 23, 2026Showing above
2024Feb 27, 2025
2023Feb 22, 2024
2022Feb 21, 2023
2021Feb 24, 2022
2020Feb 24, 2021
2019Mar 2, 2020
2018Feb 22, 2019
2017Feb 23, 2018
2016Mar 1, 2017
2015Feb 29, 2016

About Fair Value Disclosures

Fair value disclosures classify all assets and liabilities measured at fair value into a three-level hierarchy: Level 1 (quoted market prices), Level 2 (observable inputs like yield curves), and Level 3 (unobservable inputs requiring management estimates). The proportion of Level 3 assets directly reflects how much of the balance sheet depends on internal models rather than market evidence.

Key signals: a growing Level 3 balance relative to total fair-value assets increases valuation uncertainty and earnings volatility risk. Watch for transfers between levels — assets moving from Level 2 to Level 3 often signal deteriorating market liquidity. Unrealized gains and losses on Level 3 positions flow through earnings or other comprehensive income, so large swings deserve scrutiny. For financial institutions, examine the sensitivity disclosures that show how Level 3 valuations change under alternative assumptions. Compare the fair value of debt against its carrying amount to gauge hidden leverage.

Other Available Disclosures

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